The European Banking Authority has classified USDC, the dollar stablecoin issued in the EU by Circle Internet Financial Europe SAS, as a “significant” e-money token under the bloc’s Markets in Crypto-Assets rules, known as MiCA.
It is the first token to get that label. In its Oct. 14 announcement, the Paris-based authority said 45 e-money tokens have been notified in the EU under MiCA, and USDC is the first of them to be classified as significant. E-money tokens are stablecoins that track a single official currency.
Who watches what
The label splits supervision in two. From Nov. 12, direct oversight of USDC’s own funds, reserve of assets, liquidity requirements, and recovery and redemption plans moves from France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR) to the EBA. The ACPR keeps areas including governance, qualifying holdings, fit-and-proper checks, outsourcing and conflicts of interest. The two authorities said they will work together on the handover.
In plain terms: the parts of the token that decide whether a holder gets a dollar back, the reserves and the plan for paying people out, now sit with an EU-level supervisor instead of a single national one.
USDC is issued in the United States by a separate company, Circle Internet Financial, LLC. To cover that cross-border setup, the EBA said it has signed a memorandum of understanding with the New York State Department of Financial Services on cooperation and information sharing.
What the EBA did not say
The EBA did not say which of MiCA’s significance tests USDC met. The rules look at measures such as the number of holders, the value of tokens issued, and the number and value of transactions, and a 2024 Commission regulation sets out how they are counted. The EBA reviews each classification every year. Under MiCA, an issuer of a significant e-money token also faces extra requirements, mainly on liquidity and own funds, which the EBA will supervise.
USDC has about $73 billion in circulation worldwide, according to The Block’s data. Circle had not published a statement on the classification as of Thursday morning.
A busy week for EU stablecoin rules
The decision caps a week of moves by EU regulators. On Oct. 8, the European Securities and Markets Authority said crypto firms licensed under MiCA should stop offering services involving stablecoins that do not comply with MiCA, and asked national supervisors to have existing exposures cleaned up within three months. On Wednesday, as Hardwire reported, Qivalis, a euro stablecoin company backed by 37 European banks, received its e-money license from the Dutch central bank. That token has not launched.
The bottom line: the EU’s biggest regulated dollar stablecoin now gets a second, EU-level supervisor for its reserves and redemption plans, starting Nov. 12.
Sources: European Banking Authority; European Securities and Markets Authority; The Block; Cointelegraph; Hardwire Crypto